How to use the gratuity calculator
- 1 Enter your last monthly wage, as your policy defines it.
- 2 Enter your completed years of service.
- 3 Enter any extra months beyond the last full year.
- 4 Check the days of wages your policy gives per year.
Worked example
A last monthly wage of Rs 120,000 with 7 years and 8 months of service. The 8 months count as a full year, so 8 years are used. Gratuity is 30 days' wages for each year, which is Rs 120,000 × 8 = Rs 960,000.
Gratuity, provident fund and your rights
- Who pays: under the Standing Orders law, establishments covered by it usually pay gratuity to permanent workers where there is no provident fund. Many other employers pay it by policy or contract.
- Last drawn wage: gratuity is normally based on your last wage, so check whether your policy uses basic or gross pay.
- Resignation: whether gratuity is paid on resignation depends on the law that covers you and your contract.
- Tax: gratuity from an approved fund is exempt up to a limit; other gratuity can be taxable.
Starting a new job? Check the new salary's tax with the Salary Tax Calculator. Investing the gratuity? Compare with the National Savings Profit Calculator.
Features
30 days per year
The standard used under the Standing Orders law.
Part-year rounding
More than six months counts as a full year.
Policy days
Change the days if your employer pays more.
When to use it
Leaving a job
Know your gratuity before you resign. Invest it with the National Savings Profit Calculator.
Retirement
Plan your retirement money. Check tax on a new job with the Salary Tax Calculator.
Comparing offers
Value gratuity in a job package. Compare an increment with the Salary Increment Calculator.
HR teams
Work out gratuity for staff. Zakat on the lump sum is in the Zakat Calculator.
Related Tax tasks
Frequently asked questions
Who is entitled to gratuity?
Permanent workers in establishments covered by the Standing Orders Ordinance, where no provident fund is provided, are usually entitled after a minimum period of service. Many private employers also pay gratuity by policy.
How is gratuity calculated?
Usually 30 days' wages for each completed year of service, based on the last drawn wage. A part year over six months counts as a full year.
Is gratuity paid on basic or gross salary?
It depends on the law and your employer's policy. Many companies use basic salary.
Is gratuity taxable?
Gratuity from an approved gratuity fund is exempt up to a limit, and some gratuity received by government employees is exempt. Other gratuity may be taxable. Check current rules.
When must it be paid?
Usually at the end of employment, along with final settlement.
Can I get gratuity and provident fund both?
Under the Standing Orders, gratuity is required where there is no provident fund, but many employers offer both by policy.
Does gratuity depend on the type of employer?
Yes. Government employees get gratuity under pension rules, while private employees get it under labour law or company policy. Amounts and formulas differ.
Is gratuity paid if I resign?
Usually yes, if you have completed the minimum service under your company's policy or the law.
What if my company has a provident fund?
Where a provident fund exists, the Standing Orders law does not require gratuity, but your employer may still pay it by policy.
Can gratuity be paid in instalments?
It should be paid in full with final settlement, unless you agree otherwise in writing.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Built and reviewed by Hamza Farooq, founder and lead developer
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